Mohegan fuels casino, resort market rivalry in Korea

Mohegan Inspire Entertainment Resort on Yeongjong Island, near South Korea’s gateway Incheon International Airport, is attracting throngs of visitors on weekends as it is going viral on social media even before its grand opening in March.

The luxury resort complex is the first integrated resort launched by a US company in South Korea and is expected to invigorate the casino and entertainment business on the island of calm, 40 kilometers west of Seoul.

Last January, Mohegan won the first permission in 19 years to operate a new foreigners-only casino in the country after Paradise City opened the first casino, also only for foreigners, in 2017 on Yeongjong island.

The two resorts are within a 10-minute drive of each other.

Mohegan Gaming & Entertainment has invested $1.6 billion to build the complex, including the largest casino in South Korea.

It has already opened some facilities such as the hotel, arena performance hall and casino before the March 5 grand opening, according to Mohegan.

It surpasses Paradise City in terms of scale. It is more than twice the size of Paradise City and houses a 15,000-seat performance hall, the only performance arena on the island.

Inspire Resort will open an additional shopping mall inside the resort complex next month and a 1,000-seat food court and an outdoor entertainment park by the middle of this year.

Mohegan Inspire has already dealt a blow to Paradise City by poaching experienced employees.

“Inspire has recruited quite a few employees, including casino dealers and hoteliers, from Paradise City with significant hikes in salaries,” said a resort industry official.

Reflecting concerns about the negative impact of Mohegan Inspire's business growth, some analysts have lowered their target prices on Paradise Co. Its share price has been hovering between 12,000 won and 14,000 won since December last year.

They said the key profit driver for both resort operators is how many casino VIPs they could attract.

Unlike the hotel business, where room sales are limited, casinos are called businesses without a ceiling. One player can spend several million dollars in one casino game. 

Last year, Paradise Hotel & Resort, the operator of Paradise City on Yeongjong Island, achieved its highest-ever revenue of 994.2 billion won ($750 million). It derived 75% of the revenue from casino operations.

In response to the competition from Inspire Resort, Paradise City recently signed a strategic partnership with Trip.com Group, China's largest online travel agency, to expand its customer base to include those from Hong Kong, Taiwan, and Singapore, in addition to Chinese tourists.

On a positive note, Lee Hwa-jeong, an analyst at NH Investment & Securities, said that Inspire Resort’s arrival in South Korea could woo a new group of customers to the domestic casino and resort industry and eventually lead to growth in the industry overall.

Additionally, Inspire Resort’s huge arena performance hall may serve as a venue for K-pop stars’ performances and draw foreign K-pop fans.

Write to Sun-A Lee at suna@hankyung.com
 


Yeonhee Kim edited this article.